Since the UK government introduced a 5p charge for single-use plastic bags in 2015, millions of shoppers are now choosing not to use them.
In data compiled by the UK government, it was found that there has been an astounding 95% reduction in plastic bag use across England’s major supermarkets.
Given the devastating impact which plastic bags have on the environment, particularly in the world’s oceans, a 95% drop in usage demonstrates the incredible success of the government’s intervention on dealing with the externalities.
But they’re not done yet… Following the success, and the seriousness of the environmental problem which plastic bags contribute to, the government has announced a further increase in the levy from 5p to 10p effective from April 2021.
In addition to the steps being taken by the government, many large supermarkets are beginning to phase out plastic bags entirely by introducing paper bags instead.
Whilst this is all good news for protecting the environment, one has to wonder what the impact of Covid-19 is going to be. Since early this year, millions of single-use face masks have been used, all of which cannot be recycled and will undoubtedly find their way into the world’s oceans and other protected natural habitats.
THINK LIKE AN ECONOMIST!
Q1. What is meant by the term externality?
Q2. Analyse the externalities of using single-use plastic bags?
Q3. Given the information in the article, discuss the likely price elasticity of demand (PED) for plastic bags in the UK.
Q4. Evaluate the view that using paper bags would be better for the environment than plastic bags.
Q5. Discuss one other environmental issue and the possible ways in which the government could intervene to deal with this problem.
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